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It was a landmark law that would help stop the worldwide scourge of deforestation.

However, the final version of the EU's deforestation regulation, previously touted as the crown jewel of the European Green Deal, has been passed in a severely weakened state, leading to alarm from its initial author and green lawmakers.

"The regulation was stripped," stated Hugo Schally, citing the removal of key obligations for later-stage companies to verify the origin of products like palm oil, soy, wood, beef, rubber, cocoa and coffee.

Schally cautioned that a reduced number of responsible companies, less information collected, and less precise origin data would complicate the task of authorities.

A Watered-Down Law

Environmental MEP a leading green politician went further, describing the postponements, exceptions and new loopholes – including one for paper goods – as the "systematic weakening" of the law.

This outcome stands in stark contrast to the demands of more than a million EU citizens who signed a petition in 2020 calling for a ban on goods linked to forest destruction.

At its launch in 2021, then-Green Deal commissioner Frans Timmermans called it "the toughest legislation proposed to combat deforestation."

A Story of Dilution

The law's unravelling has been interpreted as the European Union retreating from its environmental promises. It faced two major postponements, ostensibly over IT issues, which drew condemnation.

"By revisiting the legislation rather than fixing a simple IT problem, the commission opened Pandora’s box," commented Toussaint.

In its first draft, the law mandated that firms to track commodities back to their specific geographic origin using GPS coordinates, making them liable for deforestation in their supply chains with criminal charges and hefty fines.

"It wasn't bureaucracy for its own sake," Schally said. "It was the mechanism that made the rules enforceable, created a verifiable paper trail, and prevented firms from obscuring their activities behind complex supply chains."

Mounting Pressure

However, the strict due diligence triggered a backlash in Brussels from multinational corporations, producer countries, conservative political groups and EU logging states.

Experts cite last year's EU elections as a turning point, creating a new political majority more skeptical of green regulations.

"Additional intense pressure came from major export markets outside the EU," said expert Andreas Rasche, suggesting the commission gave in to some demands in trade talks.

Key Loopholes Introduced

In the final legislation includes key dilutions:

• Retailers and traders were mostly exempted from conducting rigorous checks.
• A new exemption for small operators was created.
• A window for further "simplifications" was established for next spring.
• Only a handful of nations – Russia, Belarus, North Korea and Myanmar – will face the strictest monitoring.

"Instead of tightening downstream obligations, it rolled them back," lamented Schally. "By shifting responsibilities upstream, it reduced accountability."

Uncertainty for Companies

The protracted process and revisions have also caused frustration for companies that prepared in advance.

"It is very frustrating because we invested significant resources into preparing," stated Xavier Rombouts. "We purchased systems, trained staff and established procedures... now they’re saying it may be changed. It’s a big frustration."

Official Defense

An EU representative defended the outcome, saying: "The commission has responded to feedback and acted to ensure a simple, fair and cost-efficient application."

"The new text provides for predictability, which is key for business and national regulators to successfully implement this very important law."